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DECISION No. 166/1999/QD-BTC OF DECEMBER 30, 1999 PROMULGATING THE REGULATION OF MANAGEMENT, USE AND DEDUCTION OF FIXED ASSET DEPRECIATION

THE FINANCE MINISTER

Pursuant to the Government�s Decree No.15/CP of March 2, 1993 defining the tasks, powers and State management responsibilities of the ministries and the ministerial-level agencies;

Pursuant to the Government�s Decree No.178/CP of October 28, 1994 defining the tasks, powers and organizational apparatus of the Finance Ministry;

Pursuant to the Government�s Decree No.59/CP of October 3, 1996 promulgating the Regulation on financial management and business accounting for State enterprises;

Pursuant to the Government�s Decree No. 27/1999/ND-CP of April 20, 1999 amending and supple-menting the Regulation on financial management and business accounting for State enterprises;

Pursuant to the Government�s Decree No.30/1998/ND-CP of May 13, 1998 detailing the imple-mentation of the Law on Enterprise Income Tax;

In order to enhance the management, use and deduction of fixed asset depreciation in enterprises; create conditions for enterprises to accurately calculate and fully deduct the fixed asset depreciation amounts into the business costs; replace and renew machinery and equipment along the direction of application of advanced technologies and modern techniques suitable to the business requirements of enterprises and the economy;

At the proposal of the director of the Department for Financial Policies;

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on management, use and deduction of fixed asset depreciation.

This Regulation shall apply to all State enterprises. Enterprises of other economic sectors are compelled to apply only the provisions relating to the determination of expenses for tax calculation and are encouraged to apply other provisions.

Article 2.- This Decision takes effect as from January 1st, 2000.

This Decision shall replace Decision No.1062 TC/QD-CSTC of November 14, 1996 of the Finance Minister promulgating the Regulation on management, use and deduction of fixed asset depreciation. Other stipulations on management, use and deduction of fixed asset depreciation contrary to this Decision shall all be annulled.

Article 3.- The director of the Department for Financial Policies, the director of the Ministry�s Office, the director of the Department for Finance of Enterprises, the general director of Tax and the heads of units of or attached to the Finance Ministry shall, within the ambit of their respective functions and powers, have to organize, guide and inspect the implementation of this Decision.

The Managing Boards, general directors and directors of enterprises shall have to implement this Decision.

Minister of Finance
NGUYEN SINH HUNG

REGULATION ON MANAGEMENT, USE AND DEDUCTION OF FIXED ASSET DEPRECIATION

(issued together with Decision No. 166/1999/QD-BTC of December 30, 1999 of the Finance Minister)

Section I. GENERAL PROVISIONS

Article 1.- Objects and scope of application:

This Regulation shall apply to the State enterprises, including corporations, member companies of corporations, independent enterprises;

For enterprises of other economic sectors such as limited liability companies, joint stock companies, partnership companies, private enterprises, foreign-invested enterprises�, they shall only be compelled to apply the provisions relating to the determination of expenses for tax calculation, and encouraged to apply other provisions in this Regulation;

Enterprises shall effect the management, use and depreciation deduction to each fixed asset managed and used by enterprises.

Article 2.- Terms used in this Regulation shall be construed as follows:

1. Tangible fixed assets are major labor means having material shapes (each asset unit is structured independently or in a system consisting of various asset components linked together for the performance of one or several certain functions), having great values and long use duration, involved in many business cycles but still retaining their initial material shapes such as houses, architectural objects, machinery, equipment�

2. Intangible fixed assets are fixed assets which have no material shapes and demonstrate a volume of already invested value related directly to many business cycles of enterprises such as expenses for establishment of enterprises; expenses for used land; expenses for invention patents, licenses, copyrights�.

3. The financial leasing fixed assets are the fixed assets rented by enterprises from financial leasing companies if the leasing contracts satisfy at least one of the four following conditions:

a/ At the end of the contractual leasing term, the lessee may transfer the ownership right over the leased assets or continue to lease them according to the mutual agreement between the two parties;

b/ The leasing contract contains the stipulation: At the end of the leasing term, the lessee may choose to buy the leased assets at nominal prices lower than their actual value at the time of repurchase;

c/ The leasing term of a type of asset must be at least equal to 60% of the time needed for leased asset depreciation;

d/ The total rent for a type of asset prescribed in the leasing contract must be at least equal to such asset�s price on the market at the time of signing the contract.

If any fixed asset leasing contract fails to satisfy any of the four conditions mentioned above, such assets shall be considered assets leased for operation.

4. The original price of a fixed asset means the entire actual expenses for acquiring the fixed asset until it is put into normal operation such as the actual purchase price of the fixed asset; the transportation, loading and unloading expense, the installation and test-run expense; the interests on investment loan for the fixed asset before it is not yet handed over and put into use; taxes and registration fee (if any)�

5. The fixed asset using duration means the time the enterprise is expected to use the fixed asset for business activities under normal conditions, in conformity with techno-economic parameters of the fixed asset and other factors related to the operation of the fixed asset.

6. The fixed asset wear means the gradual reduction of the use value and the value of the fixed asset due to its participation in the business activities as the result of natural abrasion, technical advance� in the course of operation of the fixed asset.

7. The fixed asset depreciation means the systematic calculation and distribution of the original prices of the fixed assets into the business costs throughout the use duration of the fixed assets.

8. The accumulative depreciation amount of fixed assets means the total depreciation already deducted into the business costs through various business periods of the fixed assets up to a definite time.

9. The remaining value of a fixed asset on the accounting books means the remaining value of the fixed asset reflected on the accounting books, which is determined by the difference between the original price of the fixed asset and its accumulative depreciation amount by the definite time.

10. Fixed asset repair means the renovation, maintenance or repair of damage arising in the course of operation in order to restore the normal working capacity of the fixed asset.

11. Fixed asset upgrading means activities aimed to prolong the use duration, raise the capacity as well as operating properties of the fixed asset such as renovation, construction and installation, additional equipment for the fixed asset.

Article 3.- Annually, the enterprises may take initiative in determining the use duration of fixed assets according to the provisions in Article 15 of this Regulation and their production and business situation.

Section II. PROVISIONS ON FIXED ASSET MANAGEMENT AND USE

Article 4.- Criteria and identification of fixed assets

1. Criteria and identification of tangible fixed assets:

All labor means being tangible fixed assets structured independently or in a system with separate asset parts lying adjacent to each other in order to perform one or several certain functions and the lack of any part therein will make the whole system unable to operate shall be considered fixed assets if they simultaneously satisfy the two following criteria:

a/ Having the use duration of 1 year or more;

b/ Having the value of 5,000,000 (five million) dong or more;

In cases where a system consists of many separate asset parts joined together, in which each component part has its own use duration and if without any part therein the system is still able to perform its major function while the fixed asset management and use demand the separate management of each asset part, such separate asset parts shall be considered independent tangible fixed assets (for example seats, frame and engine� in an airplane).

For draught and/or product-yielding animals, each of such animals shall be considered a tangible fixed asset.

For perennial tree gardens, each of them shall be considered a tangible fixed asset.

2. Criteria and identification of intangible fixed assets

All actual expenses made by enterprises which simultaneously satisfy two conditions prescribed in Clause 1, this Article, and do not formulate tangible fixed assets shall be considered intangible fixed assets. If such expenses do not simultaneously satisfy the two criteria mentioned above, they shall be accounted directly or distributed gradually into the business costs of enterprises.

Article 5.- Determining the original prices of fixed assets:

1. Determining the original prices of tangible fixed assets:

a/ The procured fixed assets:

The original price of a procured fixed asset (both brand-new and used one) shall include the actually paid price; the interest of loan for investment in the fixed asset when it is not yet put into use; the expenses for transportation, loading and unloading; the expenses for repair, renovation before the fixed asset is put into use; the expenses for installation, test-run, taxes and registration fee (if any)�

b/ Fixed assets of construction investment type:

The original price of the construction investment fixed asset (both self-made and hired from outside) is the price of the final settlement of the construction work as provided for in the current Investment and Construction Management Regulation, other relevant expenses and registration fee (if any).

For fixed assets being draught and/or product-yielding animals or perennial tree gardens, the original price shall be all the actual expenses for such animals or gardens from the time they are formulated to the time they are put into exploitation and use as stipulated in the current Investment and Construction Management Regulation, other relevant expenses and registration fees (if any).

c/ Fixed assets which have been supplied or transferred from other places�

The original price of a supplied or transferred� fixed asset shall include its remaining value on the accounting books of the supplying or transferring� unit or value actually determined by the Delivery and Receipt Council and expenses for renovation, repair, transportation, loading and unloading, test-run; registration fee (if any)�, paid by the asset-receiving party before putting the fixed asset into use.

Particularly the original price of fixed asset transferred among member units with dependent accounting of an enterprise shall be the original price reflected at the transferring unit in compatibility with the dossiers of such fixed asset. The fixed asset- receiving unit shall base itself on the original price, the accumulative depreciation amount, the remaining value on the accounting books and the dossier set of such fixed asset to determine the original price, the accumulative depreciation amount and the remaining value on the accounting book of the fixed asset and reflect them into the accounting book. All expenses related to the transfer of fixed asset among member units with dependent cost-accounting shall not be accounted in the increase of the original price of the fixed asset but into the business cost in the period.

d/ Fixed assets which are given, donated, presented, received as capital contribution to joint ventures or as contributed capital reimbursement, detected as surplus�

The original price of a fixed asset given, donated, presented as gift, received as capital contribution to joint ventures, received as contributed capital reimbursement, detected as surplus� shall include its value actually evaluated by the Delivery and Receipt Council; the expenses for renovation, repair of fixed asset; the expenses for transportation, loading and unloading, test-run, registration fee (if any)� paid by the recipient before putting the fixed asset into use.

2. Determining the original prices of intangible fixed assets:

a/ The expense for the used land means the total actual expenses directly related to the used land, including the expense for the land use right, the ground clearance compensation, the expense for ground leveling and fill-up, the registration fee (if any)� (excluding expenses for the construction of works on land).

Where an enterprise pays the land rent annually or periodically, these expenses shall be gradually distributed into the business costs in the period(s), not accounted into the original price of the fixed asset.

b/ The expense for establishment of an enterprise means the actual expenses related directly to the preparation for the emergence of the enterprise considered by its founding members part of the contributed capital of each person and recorded in the enterprise�s charter capital, including expenses for studies, exploration and elaboration of the investment project for the establishment of the enterprise; the expense for project evaluation; founding meetings�

c/ The research and development expense means all the actual expenses of an enterprise for the implementation of the work of research, exploration, elaboration of long-term investment plans� with a view to bringing about long-term interests for the enterprise.

d/ The expense for invention patents, licenses, copyrights, the copyright purchase, technological transfer� means all the actual expenses of an enterprise for research projects (including expenses for trial production, examination, pre-acceptance test by the State) which have been granted invention patents, licenses, copyright certificates, or expenses for the purchase of the copyright, trademarks by the enterprise, expenses for the technological transfer from organizations and individuals�, and all these expenses have the effect of direct service of the enterprise�s business activities.

e/ The expense for business advantages means the expense for the difference additionally paid by the enterprise (the additionally paid difference = the purchase price - the value of assets according to the actual evaluation) besides the value of assets according to the actual evaluation (immovable and movables�) when the enterprise buys, merges or consolidates another enterprise. This advantage is formulated by the advantages in business location, reputation and prestige with customers, the professional skills of the contingent of laborers, and the managerial and organizational skills of such enterprise�s management board.

3. Determining the original prices of financial leasing fixed assets: The original price of a financial leasing fixed asset, which is reflected at the renting unit as the unit owning the asset shall include the actual purchase price; the expenses for transportation, loading and unloading; the expenses for repair, renovation before putting the fixed asset into use; the expenses for installation, test-run, taxes and registration fee (if any)�.

The difference between the fixed asset rental payable to the leasing unit and the original price of such fixed asset shall be accounted into the business costs in conformity with the duration of the financial leasing contract.

Article 6.- Expenses for upgrading fixed assets, reflected as the increase in the original prices of such fixed assets, must not be accounted into the business costs in the period.

The fixed asset repair expenses shall be considered losses and accounted separately or distributed gradually into the business expenses in the period.

For a number of particular branches where the fixed asset repair expenses arise unevenly between periods, years, if enterprises wish to deduct in advance the fixed asset repair expenses into the business expenses, they shall have to draw up plans therefor and submit them to the Finance Ministry for consideration and decision; after getting the written consents of the Finance Ministry, the enterprises shall have to notify their directly managing tax bodies thereof.

Enterprises shall have to make the final settlement of the actually arising repair expenses with those deducted in advance; if the actual repair expense is larger than the deducted repair expense, their difference shall be accounted separately or distributed gradually into the expenses in the period; if the actual repair expense is smaller than the deducted amount, the difference shall be accounted into other revenues.

Enterprises of particular branches, even if having applied the method of distribution of fixed asset repair expenses into subsequent business periods, shall also have to draw up plans for distribution of fixed asset repair expenses and notify their direct managing tax offices thereof.

Article 7.- All fixed assets in enterprise must have their respective dossier sets (each include the record on fixed asset delivery and receipt, contract, fixed asset purchase invoice and other relevant vouchers), be monitored, managed, used and depreciated in strict accordance with the provisions of this Regulation. Fixed assets must be classified, inventoried, numbered with separate cards, overseen in details according to each subject recording the fixed assets and be reflected in the fixed asset monitoring books.

Enterprises shall have to manage and use the fixed assets which have been fully depreciated but still involved in business activities like ordinary fixed assets.

Periodically at the end of each fiscal year, enterprises shall have to inventory the fixed assets. All cases of surplus or deficit of fixed assets must be recorded in minutes, with their causes sought and handling measures taken.

Article 8.- Classification of fixed assets in enterprises:

Depending on the properties of their fixed assets, enterprises shall classify them according to the following norms:

1. The fixed assets used for business purposes are those used by the enterprises for their business purposes.

a/ Intangible fixed assets: Establishment expense, research and development expense, concession rights, exploitation rights, patents, trade labels,�

b/ Tangible fixed assets: To be classified by enterprises into the following classes:

Class 1: Houses, architectural objects: are fixed assets of enterprises, which have been formulated after the construction process such as working offices, warehouses, fences, water towers, yards, houses� decorative works, roads, bridges and sluices, railways, gangways, quays�

Class 2: Machinery and equipment: are all kinds of machines and equipment used in business activities of enterprises such as special-use machinery, working equipment, technological chains, single machines�.

Class 3: Transport means, transmission equipment are different kinds of transport means, including railway, waterway, land and air transport means, pipe lines and transmission equipment such as communication systems, electricity supply systems, water pipe lines, conveyer belts�.

Class 4: Control equipment and devices are those used for the management of business activities of enterprises such as computers in service of management, electronic equipment, equipment and device for measurement and quality control, dehumidifiers, vacuum cleaners, termite and wood-worm killing devices�.

Class 5: Perennial tree gardens, draught and/or product-yielding animals are perennial tree gardens such as coffee gardens, tea gardens, rubber plantations, orchards, lawns, green carpets�; draught and/or product-yielding animals such as elephant herds, horse herds, buffalo herds, cow herds�.

Class 6: Other types of fixed assets are all other fixed assets not yet listed in the five above classes such as pictures, paintings, art works�.

2. Fixed assets used for welfare, non-business, security and defense purposes are those managed and used by enterprises for welfare, non-business, security and defense purposes in the enterprises. These fixed assets shall be also classified according to Clause 1, this Article.

3. Fixed assets preserved, kept or stored for the State are the fixed assets which the enterprises preserve or keep for other units or store for the State according to the regulations of the competent State bodies.

Depending on their own managerial requirements, the enterprises shall themselves further classify their fixed assets in appropriate specific groups.

Article 9.- The monitoring, management, use and depreciation deduction of fixed assets must comply with the principles of original price-based evaluation, accumulative deduction and remaining value on accounting books of fixed assets:

The remaining The

value on The original accumulative

accounting = price of - deduction

books of fixed asset of the fixed

fixed asset asset

The original prices of fixed assets in enterprises shall change only in the following circumstances:

1. Re-determining the value of fixed assets;

2. Upgrading the fixed assets;

3. Disassembling one or several parts of a fixed asset;

When changing the original prices of fixed assets, the enterprises shall have to make records thereon, inscribing clearly grounds for such changes and re-determining the norms of original prices, remaining values on accounting books and accumulative deductions of the fixed assets and conduct the accounting according to the current regulations.

Article 10.- Under the financial regime, the enterprises shall have the right to:

- Mobilize fixed assets among member units for the purposes of more efficient business activities;

- Take initiative in selling fixed assets to recover capital for use for the purpose of more efficient business;

- Take initiative in disposing fixed assets which are outmoded and unsaleable or irreparably damaged;

- Lease fixed assets which are temporarily unused, but must ensure the monitoring and management of such fixed assets. The enterprises and the fixed asset lessees must enter into fixed asset leasing contracts which clearly state the type of fixed assets, the leasing term, the payable rental and the liabilities of the parties to the contracts�.

- Pledge or mortgage the fixed assets� but must ensure the monitoring and management thereof.

Upon the delivery and receipt of fixed assets, a record must be made on the status of the fixed assets, the liabilities of the parties and measures to handle damage, losses caused to the fixed assets.

During the period of pledging, mortgaging, leasing (for operation)� fixed assets, the enterprises still have to calculate and depreciate these fixed assets into the business expenses in the period.

Upon the liquidation or sale of fixed assets, the enterprises shall have to set up a council to determine the recoverable value in case of liquidation, to determine the selling prices of fixed assets, organize the liquidation or sale of fixed assets according to the current regulations.

All fixed asset leasing, pledging, mortgaging, mobilizing� activities must comply with the provisions of the Civil Code and the current regulations on the financial management of enterprises.

Article 11.- For fixed assets rented for operation, the enterprises shall have to manage and use them in accordance with the leasing contracts. The enterprises shall not depreciate these fixed assets; the expenses for fixed asset renting shall be calculated into the business costs in the period.

Article 12.- For financial leasing fixed assets, the enterprises shall have to monitor, manage, use and depreciate them like their own fixed assets and fulfill all obligations committed in the fixed asset- leasing contracts.

The lessors in their capacity as the investors shall have to monitor and manage the fixed assets and strictly comply with the provisions in the fixed asset leasing contracts.

Article 13.- For labor means other than fixed assets (the labor means which do not satisfy the value criteria but have the use duration of one year or more are called minor labor tools), the enterprises shall have to monitor, manage and use them like fixed assets and gradually distribute their values into business costs according to their use duration.

For small labor tools which have been fully depreciated but are still useable, the enterprises shall have to monitor, manage and use them like ordinary small labor tools but shall not distribute their values into business costs.

Article 14.- For the State enterprises engaged in public-utility activities, the fixed asset leasing, pledging, mortgaging, sale, liquidation� must strictly comply with the financial management regulations applicable to State enterprises engaged in public-utility activities.

Section III. PROVISIONS ON DEPRECIATION DEDUCTION AND THE USE OF FIXED ASSET DEPRECIATION MONEY

Article 15.- Determining the use duration of tangible fixed assets:

1. The use duration of a fixed asset shall be determined on the basis of the following conditions:

- The technical life span of the fixed asset according to design;

- The present status of the fixed asset (the duration for which the fixed asset has been used, the fixed asset generation, the actual status of the fixed asset�);

- The economic life span of the fixed asset;

Particularly for brand-new fixed assets (not yet used), the fixed assets which have been used but their actual values remain 90% or higher (as compared to the selling prices of the brand-new fixed assets of the same types on the market); the enterprises shall have to base themselves on the fixed assets� use duration bracket stipulated in Appendix I issued together with this Regulation to properly determine the use duration of fixed assets.

2. The use duration of each fixed asset of the enterprises shall be uniformly determined in the fiscal year. For enterprises which have determined the use duration of fixed assets in strict accordance with regulations, the tax agencies must not impose at their own will the use duration of fixed assets to determine the expenses for enterprise tax calculation.

If an enterprise wishes to determine the use duration of their fixed assets differently from the use duration bracket stipulated in Appendix I issued together with this Regulation, it shall have to explain clearly the grounds for determining the use duration of such fixed assets to the Finance Ministry for consideration and decision.

Particularly for enterprises which borrow capital for production/business expansion or intensive investment and their business results are not in the red, they shall be allowed to determine the use duration of the fixed assets formulated from the loan capital according to the time in the loan contracts, but such use duration must at most not be 30% shorter than the minimum use duration of such fixed assets stipulated in Appendix I.

3. Where there appear factors (such as the upgrading or disassembling one or several parts of the fixed asset�) which prolong or shorten the previously determined use duration of the fixed asset, the enterprises shall re-determine the use duration of such fixed asset according to the above regulations at the time of the completion of the arising operation, and at the same time have to make record thereon, clearly stating the grounds for the change in the use duration.

Article 16.- Determining the used duration of intangible fixed assets:

Enterprises shall themselves determine the use duration of intangible fixed assets within the period of from 5 years to 40 years.

Article 17.- Determining the use duration of fixed assets in a number of special cases:

- For foreign-invested projects in the form of Build-Operate-Transfer (BOT), the use duration of fixed assets shall be determined according to the remaining operation duration of the projects.

- For business cooperation contracts (BCC) involving foreign parties, upon the expiry of the contracts when the foreign parties transfer without indemnities to the Vietnamese State the fixed assets, the use duration of the transferred fixed assets shall be determined according to the remaining duration of the projects.

Article 18.- Methods of deduction for fixed asset depreciation:

1. The fixed assets in enterprises shall be depreciated by method of line deduction with the following contents:

- Based on the provisions of this Regulation, enterprises shall determine the use duration of fixed assets;

- The average annual depreciation level for fixed assets shall be determined according to the following formula:

The average annual The original price of the fixed asset

depreciation level = ------------------------------------------------

of a fixed asset The use duration

The average annual depreciation can be made in complete unit numbers according to the following stipulations:

- The first decimal with the value of five or more shall be made into 1 value unit for the unit number (For example: 950,713.5 dong shall be made into 950,714 dong).

- If the first decimal is valued at 4 or under, the unit figure shall be retained (For example: 950,713.4 dong shall be made into the complete figure of 950,713 dong).

If the enterprises make the monthly depreciation, the annul depreciation figure shall be divided for 12 months.

2. Where the use duration or the original price of a fixed asset changes, the concerned enterprise shall have to re-determine the average depreciation of the fixed asset by dividing the remaining value on the accounting book (:) the re-determined use duration or the remaining use duration (determined as the difference between the registered use duration and the finished use duration) of the fixed asset.

3. The depreciation level for the last year of the use duration of the fixed asset shall be determined as the difference between the original price of the fixed asset and the already-made accumulative depreciation of such fixed asset.

Article 19.- The fixed asset increase and decrease shall be reflected at the time of fixed asset increase and decrease in the month.

The depreciation or non-depreciation of fixed assets shall be effected on the principle of full month. Fixed assets which increase, decrease or cease to participate in business activities (being put into store according to the State�s regulations, awaiting liquidation�) in the month shall be depreciated or not depreciated from the first day of the following month.

Article 20.-

1. The enterprises� fixed assets involved in business activities must all be depreciated and the depreciation levels must be accounted into the business costs in the period.

2. Fixed assets which are not involved in business activities shall not be depreciated, including:

- Fixed assets which are no longer in use and not yet put to use by decisions of the Managing Boards (for enterprises with Managing Board) or the agencies having decided the establishment of enterprises, permitting the enterprises to put the fixed assets into stores for custody and preservation or to transfer them to other enterprises.

- Fixed assets belonging to the State reserve, which are assigned to enterprises for management and keeping for the State.

- Fixed assets in service of public-utility activities in the enterprises such as kindergartens, clubs, tradition houses, cafeteria�.

- Fixed assets in service of the common requirements of the entire society not in service of the business activities of enterprises such as dykes, dams, bridges, sluices, roads� which are assigned by the State to the enterprises for management.

- Other fixed assets not involved in business activities.

Enterprises shall manage and monitor the above-said fixed assets like the fixed assets used in business activities and calculation the corrosion levels of such fixed assets (if any); the annual corrosion level shall be determined by dividing the original price (:) for the fixed asset�s use duration determined according to the regulations in Clause 1, Article 18 of this Regulation.

If these fixed assets are involved in business activities, the enterprise shall, during the time the fixed assets are involved in business activities, calculate the depreciation into the business costs of the enterprises. The depreciation money shall be distributed according to the origins of the fixed assets.

Article 21.- Enterprises must not calculate and deduct the depreciation for fixed assets which have been fully depreciated but still used in the business activities.

For fixed assets which have not yet been fully depreciated but got damaged, the enterprises shall have to determine the causes and compensation liability, claim the compensation for the damage and handle the losses according to current regulations.

For fixed assets awaiting liquidation decisions, the enterprises shall not make depreciation deduction from the time the fixed assets cease to participate in business activities as prescribed by this Regulation.

Article 22.- The Council for Delivery and Receipt, Liquidation or Sale of the fixed assets in an enterprise set up by the decision of such enterprise shall comprise the compulsory members being the enterprise�s director, chief accountant or head of the finance-accounting section, a technical expert knowledgeable about such type of fixed asset (who is inside or outside the enterprise), the representative of the asset-delivering party (if any), and other members decided by the enterprise. For special cases or as stipulated by the current financial management regulations, the enterprise additionally invites the representatives of its directly managing financial agency and the eco-technical branch-managing agency (if any) to join the Council.

Article 23.- The use of the fixed asset depreciation amounts by the enterprises and the mobilization of the fixed asset depreciation money of member units of corporations must comply with the regulations on the current financial management regime of the State and the financial regulations of the corporations.

Section IV. IMPLEMENTATION ORGANIZATION

Article 24.- Units of or attached to the Finance Ministry shall, within the scope of their functions and tasks, have to implement, organize and guide the enterprises to implement this Regulation.

Article 25.- This Regulation takes effect as from January 1st, 2000.

Minister of Finance
NGUYEN SINH HUNG

APPENDIX I

USE DURATION BRACKET FOR FIXED ASSETS OF VARIOUS TYPES

(Issued together with the Finance Minister�s Decision No. 166/199/QD-BTC

of December 30, 1999)

Minimum use Maximum

Lists of fixed asset groups duration use duration

(year) (year)

A. Motor machinery, equipment

1. Motor engine 8 10

2. Electricity generator 7 13

3. Transformer and power-source equipment 7 12

4. Other motor machinery, equipment 6 15

B. Working machinery, equipment

1. Machine tool 7 10

2. Mining construction machines 5 8

3. Tractor 6 8

4. Agricultural, forestrial machines 6 8

5. Water and petroleum pumps 6 8

6. Metallurgical equipment, equipment for anti-rust and metal erosion

surface processing 7 10

7. Specialized equipment for chemicals production 6 10

8. Specialized machinery, equipment for production of construction

materials, porcelains, glasswares 6 8

9. Specialized equipment for production of electronic, optic, precision

component. 5 12

10. Machinery, equipment for leather, stationery and cultural products-

printing industries 7 10

11. Textile machinery & equipment 10 15

12. Garment machinery & equipment 5 10

13. Paper industry machinery & equipment 5 15

14. Machinery & equipment for food/foodstuff production and processing 7 12

15. Information, communication, cinematographic & medical machinery 6 12

16. Electronic, information machinery & equipment 3 15

17. Other working machinery, equipment 5 12

C. Measuring, test instruments

1. Equipment for mechanical, acoustic or thermological measurement or test 5 10

2. Optical and spectro equipment 6 10

3. Electrical and electronic equipment 5 8

4. Equipment for physio-chemical measurement and analysis 6 10

5. Radiation-measuring equipment and devices 6 10

6. Particularly specialized equipment and devices 5 8

7. Other measuring and test equipment 6 10

8. Foundry moulds 2 5

D. Transport equipment and means

1. Land transport means 6 10

2. Railway transport means 7 15

3. Waterway transport means 7 15

4. Air transport means 8 20

5. Pipe transport means 10 30

6. Cargo loading, unloading, lifting means 6 10

7. Other transport equipment and means 6 10

E. Control instrument

1. Calculating, measuring equipment 5 8

2. Machinery, electronic equipment and computer software in service

of management 3 8

3. Other control facilities and tools 5 10

F. Houses, architectural objects

1. Solid houses (1) 25 50

2. Other houses (1) 6 25

3. Warehouses, tanks; bridges, roads; parking lots, sun-drying yards 5 20

4. Embankments, dams, sluices, canals, ditches, ports, dry docks� 6 30

5. Other architectural objects 5 10

G. Animals, perennial tree gardens

1. Assorted animals 4 15

2. Industrial tree gardens, orchards, perennial tree gardens 6 40

3. Lawn, plant greenery 2 8

H. Other types of fixed assets not specified in the above groups 4 25

Note:

Solid houses include dwelling houses, working offices, office building, hotels� determined as having the solidity of Grade I, Grade II. Other houses include dwelling houses, working offices, office building� determined as having the solidity of Grade III, Grade IV according to the regulations of the Ministry of Construction.

APPENDIX II

EXAMPLE OF FIXED ASSETS DEPRECIATION CALCULATION AND DEDUCTION

(Issued together with Finance Minister�s Decision No. 166/1999/QD-BTC

of December 30, 1999)

Example: Company A purchases a fixed asset (100% brand new) at the invoice price of 119 million dong, with the discount of 5 million dong, transport expense of 3 million dong, the installation and test-run expense of 3 million dong.

1. The fixed asset has the technical life span of 12 years, its use duration anticipated by the enterprise is 10 years (in conformity with the regulations in Appendix I), the fixed asset is put into use on January 1st, 2000.

The original price of the fixed asset = 119 million - 5 million + 3 million + 3 million = 120 million dong.

The average annual depreciation level = 120 million : 10 years = 12 million dong/year.

The monthly depreciation level = 12 million : 12 months = 1 million dong.

Annually, the enterprise deducts 12 million dong of such depreciation expense into the business cost.

2. In the 5th year of the use duration, the enterprise upgrades the fixed assets with the total expense of 10 million dong; the re-evaluated use duration is 7 years (increasing by 2 years as compared to the use duration initially registered, the date of completion and putting the asset into use is January 1st 2007.

The original price of the fixed asset = 120 million + 10 million = 130 million dong.

The accumulative depreciation already deducted = 12 million dong x 5 years = 60 million dong.

The remaining value on accounting book = 130 million - 60 million = 70 million dong.

The annual depreciation level = 70 million dong : 7 years = 10 million dong/year.

The monthly depreciation level : 10,000,000 : 12 = 833,000 dong.

From 2007 on, the enterprise shall monthly deduct the depreciation level of 833,000 dong into its business cost for the upgraded fixed asset.-